OCC credit rating remains unaffected
23 August 2018 Chicago
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Standard & Poor (S&P) revealed OCC credit rating remains unaffected by the approval of the company’s new financial safeguards framework by the US Securities and Exchange Commission.
In a bulletin posted on its website, S&P said OCC’s decision to “size its clearing fund to formally provide enough resources to cover the simultaneous default of its two largest clearing members (cover 2) versus a default of its single largest clearing member (cover 1) in the current framework will put OCC at par with most US and European peers and will be consistent with our expectation, already factored in the ratings.”
S&P also said: “We regard it important that a CCP has sufficient resources to withstand the liquidity strain that could arise if two leading clearing members default.”
Craig Donohue, OCC executive chairman and CEO, commented: “S&P’s announcement is a strong recognition of OCC’s efforts to strengthen its financial safeguards framework and to promote stability and market integrity through effective and efficient clearance, settlement and risk management services.”
John Davidson, OCC president and COO added: “This announcement reflects favourably on the outstanding work being performed every day by our team on behalf of our participating exchanges, clearing firms and market participants.”
“We will continue to focus our energies on strengthening the resilience, risk management and capitalisation of OCC in order to ensure confidence in the financial markets and the broader economy.”
In a bulletin posted on its website, S&P said OCC’s decision to “size its clearing fund to formally provide enough resources to cover the simultaneous default of its two largest clearing members (cover 2) versus a default of its single largest clearing member (cover 1) in the current framework will put OCC at par with most US and European peers and will be consistent with our expectation, already factored in the ratings.”
S&P also said: “We regard it important that a CCP has sufficient resources to withstand the liquidity strain that could arise if two leading clearing members default.”
Craig Donohue, OCC executive chairman and CEO, commented: “S&P’s announcement is a strong recognition of OCC’s efforts to strengthen its financial safeguards framework and to promote stability and market integrity through effective and efficient clearance, settlement and risk management services.”
John Davidson, OCC president and COO added: “This announcement reflects favourably on the outstanding work being performed every day by our team on behalf of our participating exchanges, clearing firms and market participants.”
“We will continue to focus our energies on strengthening the resilience, risk management and capitalisation of OCC in order to ensure confidence in the financial markets and the broader economy.”
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